Net 1 probe shows FCPA's awesome reach 
Thursday, December 6, 2012 at 2:23AM
Richard L. Cassin in Interstate Commerce, Issuer, Jurisdiction, Mails, NNet 1, South Africa

It's the type of scenario sometimes described at FCPA conferences, and intended to frighten those in the audience.

But in the case of South Africa-based Net 1 UEPS Technologies, Inc., the scenario is real.

Net 1 said in an SEC filing this week that it's under investigation by U.S. enforcement agencies for payments to government officials in the South African Social Security Agency that might have violated the FCPA.

Although there are already about 90 names on our corporate FCPA investigation list, this one is unusual.

Assuming those who may have paid the bribes are South Africans, here's the scenario:

The United States Department of Justice (with help from the FBI) and the SEC are now looking into possible prosecution of payments (1) by South Africans (2) working for a South African company (3) in South Africa (4) to South Africans (4) who work for or on behalf of a South African government agency.

So it's a South Africa line up start to finish -- a local problem, converted by the FCPA into something . . . . global.

Nasdaq-listed Net 1 is an 'issuer.' All issuers are subject to the FCPA's accounting standards.

For the anti-bribery provisions, non-U.S. companies (even issuers) are subject only to territorial jurisdiction. That means they can be prosecuted for an offense only for acts committed while in the territory of the United States, or if they corruptly make use of the mails or any means or instrumentality of interstate commerce.

The words sound technical. But what's important is that the DOJ generally takes an expansive view of jurisdiction over foreign companies under the antibribery provisions.

In Net 1's case, specifics about possible jurisdictional claims aren't known. But the scenario still deserves a lot of attention.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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